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All over the world, people are feeling the weight of economic uncertainty. They’re worried about layoffs, rising inflation, and just keeping up. This stress is pushing many to make short-term financial choices that can hurt them in the long run.
What many don’t realize is financial stress is more than just a money problem—it directly affects mental well-being. When finances impact mental health, it can lead to burnout, decreased focus, and lower productivity over time.
When organizations give their employees the tools for financial wellbeing, it’s a win-win for both their bank accounts and their peace of mind.
The impact of financial stress on mental health
Let’s say I have a client experiencing financial difficulty. This causes them to be stressed and anxious, which is intensified when they go without essentials like food. This snowballs into mental health problems, which make it difficult for them to earn and manage their money and spending. Even asking for help is tough, which leads to more financial difficulty.
And the cycle continues to repeat. Unfortunately, it’s not an uncommon one:
- 46% of people with debt also have a mental health diagnosis
- 86% of people with mental health issues in addition to debt say their financial problems make their mental health worse
- Those who have debt are three times more likely to contemplate suicide
Money isn’t just about finances. It’s emotional. And for some people, it’s deeply tied to the emotions of fear, shame, and guilt. As a coach for Spring Health, part of my job is to untangle these emotions around money.
For example, one of my clients chronically overspent. Just having someone in their corner to support and guide them through difficult financial times was enough to help this person break the cycle.
For mental stability, financial stability is key
The overwhelming anxiety and stress that come with financial struggles can make it hard for employees to see a clear path forward. For many, simply gaining a better understanding of their financial situation is the first step toward regaining control and improving their mental well-being.
So, how can HR and benefits leaders support employees in this area? Start by offering tools like budgeting apps. One great example is You Need a Budget (YNAB), which helps users take control of their finances through proactive planning.
Another impactful approach is to provide access to financial literacy programs. By equipping employees with the knowledge and resources to manage their money more effectively, you can help reduce financial stress and improve overall mental health.
How EAPs can support financial and mental health
Negative emotions like fear, shame, and guilt often arise around topics like money, and they’re even harder to manage while also facing financial hardship.
One way to help employees navigate these challenges and regain a sense of control is by offering financial coaching or counseling through Employee Assistance Programs (EAPs).
EAPs offer several key benefits for employees facing financial stress:
- Confidential support to address financial concerns without fear of judgment
- Financial stress coaching to help employees create budgets, manage debt, and plan for future financial stability
- A holistic approach that integrates both financial and mental health support
Why HR benefit leaders must prioritize financial health
When organizations invest in financial health programs, they help build a happier, more resilient workforce. HR and benefits leaders play a key role in making this happen. Consistent promotion of these services is essential to ensure employees are aware of and can easily access them.
Additional strategies for HR leaders to enhance financial wellness include:
- Tailoring financial coaching to meet the unique needs of different employee demographics
- Integrating financial wellness programs with mental health initiatives for a more holistic approach
By taking these steps, HR leaders can create a culture of support that fosters both financial security and mental well-being.
Financial wellness is a journey, not a quick fix
Talking about money can be tough, especially for those facing debt or financial hardship. But it’s important to remember that achieving both financial and mental wellness doesn’t happen overnight.
It’s a journey made up of many small steps, and each step forward can make a difference.
As we've already mentioned, improving workplace wellness starts with you. By prioritizing a mentally healthy HR department first, you can create the ripple effects that lead to a healthier workplace for all.
Discover the five trends shaping workplace mental health in 2025 and learn how to support your teams with strategies that truly make a difference.
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